Speaking Up

The Business Journal asked some of South Florida’s top business leaders two key questions related to doing business in the region in the past, present and future:

1.What do you feel were South Florida’s biggest business stories over the past 30 years?

2. What are the region’s business environment strengths and challenges going into the future?

Cesar L. Alvarez

Attorney and executive chairman, Greenberg Traurig

1. Clearly, the face of South Florida changed in a very dramatic manner when, in 1980, Fidel Castro opened the Port of Mariel. By some estimates, more than 125,000 Cubans fled to the United States in the six months following that act of desperation, the majority of those arriving and staying in Florida and South Florida. This, and the Cuban migration of the mid-1990s, as well as the migration from just about every single country in Central and South America and from Haiti during the past 30 years, has changed South Florida in the most dramatic way.

2. One of South Florida’s greatest resources is its tremendous diversity of faces and their talents. The same can be said about one of its greatest challenges. New ideas, skills and experiences arrive on our shores unencumbered by physical, economic or political views. To many, South Florida is the epicenter of the freedom from ideologies that suppress or limit the future. We are warm and welcoming, and diversity has served us well, allowing growth economically, as well as geographically. Of course, these strengths are also our challenges. Investing in South Florida so as to be able to position ourselves as leaders in higher education, clean technology and as a center for excellence in health care, as well as encouraging the very diverse entrepreneurial talent pool of South Florida, will go a long way toward answering the challenges and coming out as the victors in the new world economy we are well positioned to be.

Ron Bergeron

Founder, Bergeron Land Development

1. I would say the biggest business story was all of our growth from construction and tourism. We had a tremendous amount of growth in the last 30 years. The biggest part of our economy for the past 50 years has been tourists and construction – from high-rises and townhouses to the American dream, a home.

2. I think the challenge is that our construction growth basically developed from seagrass to sawgrass. It’s important that we focus in the future on job opportunities, education, quality of life issues and protecting one of the 10 natural wonders of the world – the Everglades, our environment. The day we destroy the Everglades, our quality of life will certainly be impacted. In the future, I think we need to focus on the ports and airports for industrial growth and tourism. We’re going to have to expand Fort Lauderdale-Hollywood International Airport so it’s convenient for people to travel to South Florida. I also think it’s important that we focus on our transportation systems, our roads. For our economy to improve, we’re going to have to employ people.

Barbara Liberatore Black

Founding principal and vice chair, CresaPartners

1. Hurricanes Andrew and Wilma caused companies to rethink disaster-recovery strategies. The changes included new building codes, causing construction cost increases. Many businesses now keep data in facilities like the NAP or in other parts of the U.S. The exodus of major insurance carriers to cover windstorm casualty has been a serious issue, along with rising costs. SFBJ is always on top of these stories and helping the general community know how to prepare for disasters.

The condo glut is something the South Florida Business Journal warned about several years before it happened. Although financial institutions and developers were publicly stating that this growth could be supported, there was no data supporting these statements. The benefit is the ability for young professionals to now rent these empty condos, and downtowns are experiencing nightlife, which is good for business.

2. South Florida is a global community. Due to our ports and airports, and close business and quality-of-life ties with South America and the Caribbean, South Florida will continue to maintain a global presence. We are not tied to just one industry. The challenges are handling the density. With the Everglades to the west and the ocean to the east, land is scarce. This causes much hardship on traffic, transportation resources and schools. SFBJ has played a key role in informing its readers as to these key challenges of our future.

Tere Blanca

President and CEO, Blanca Commercial Real Estate

1. I congratulate South Florida Business Journal for the way it has covered business in our community. The Business Journal is one of the most important sources of objective local business information for our tri-county area. In particular, I appreciated the paper’s coverage of the most recent real estate cycle, dating back to the early 2000s. As a commercial real estate professional, I took special interest in the in-depth reporting of the CRE sector and what we learned during the building boom and many cycles.

2. I really believe in the long-term future of South Florida. That having been said, we do have some short-term challenges that we need to overcome. Real estate became a very large part of our economy. Given the incredible demand that existed, mostly speculative, both residential and commercial sectors were overbuilt and overvalued.

A lot of other major industries – like hotels, banking, insurance, construction, legal, architecture, engineering – some retailers and suppliers are tied to the success of the real estate industry.

Hopefully, this has been a good lesson for us and we will find ways to diversify our economy and minimize our reliance on any one industry. At the same time, South Florida has become more global and diversified in nature. We continue to be the gateway to Latin America, but we have also built great ties with Europe, Asia and the Middle East. The arts, which are the soul of any community, have flourished. I strongly believe that we need to continue to improve our education to have long-term success nationally and globally.

Stuart Blumberg

1. One might say the creation of South Beach as a worldwide destination was the story. However, it comes in a close second to the real story – the 1998 opening of the Loews Miami Beach Hotel. How significant: What followed was a Mandarin Oriental, three Ritz-Carltons, a Four Seasons, two J.W. Marriotts, a Conrad, Trump Sonesta, the Royal Palm, the Epic, the Viceroy, a billion-dollar makeover of the Fontainebleau, and half of that for the Eden Roc. Other big stories included: the creation of the Greater Miami Convention & Visitors Bureau and Beacon Council; American Airlines choosing Miami as its new hub; the Marlins, Heat, Panthers and Dolphins; doubling the size of the Miami Beach Convention Center; the Adrienne Arsht Center for the Performing Arts; and the convention development tax.

2. The area’s strength is its resilience in coming back from adversity. Examples are Hurricane Andrew, 9/11 and the current economic recession. Each time South Florida has come back stronger. But, we still face challenges. Regional cooperation is a problem. The region is a chain with numerous broken links. Municipal governments have attorneys writing laws to benefit their clients, while ignoring the public process. Business interests constantly clash with community residents. Nothing will change as we face the challenge of the future with a lack of vision and cooperation.

Armando Codina

1. Three things came immediately to mind. One of the most important things that happened in the last 30 years was the IPO of Carnival Cruise Lines. They have thousands of employees and are a major corporate headquarters. I would add Royal Caribbean Cruises Ltd., as well, with one exception – the amount of wealth that was created by that Carnival IPO and how much the founding Arison family has done for this community. That was a transforming event.

Next, the demise of Eastern Airlines, which was headquartered here. It brought in American Airlines, which is the closest thing you can have to a headquarters without it actually being here because of their presence, their giving and their employment. Eastern declared bankruptcy, so the gates were sold and American was the prevailing party. AA is the only legacy airline that has not filed for bankruptcy.

And finally, the demise of Southeast Bank. It was only major bank headquartered here, and its failure took the banking center from here to Charlotte, N.C.

2. A lot of the challenges we have mirror the issues of this nation. One of the issues we have is not only creating jobs, but creating high-paying jobs. Attempts are bringing certain industries, like biotechnology, here are outstanding efforts, but they take time.

Kendall Coffey

Managing partner, Coffey Burlington

1. The biggest ongoing news story over the past 30 years has been the remarkable emergence of South Beach as an exciting magnet for everything from spectacular condominium and retail projects to NBA superstars. Thirty years ago, a LeBron James would not have announced any inclination of taking his “talents to South Beach.” Indeed, I recall from the 1980s a Las Vegas comedian who got a huge laugh quipping that South Beach was for “old people and their parents.” Today, it is one of the most attractive venues in America for fun and profit. Throughout the years, the South Florida Business Journal has chronicled this turnaround, superbly capturing the excitement with stories such as “South Beach Goes Hollywood” in 1996 and “South Beach Sizzles” a decade later.

2. The biggest challenge is getting past the recent and calamitous real estate collapse through strategic, incessant and enthusiastic outreach to the international community. We should be a high-decibel cheerleader with a high-voltage welcome sign to foreign visitors, as well as immigrants. This includes free-spending tourists, penny-pinching students and the wealthy and entrepreneurial, as well as the humble and hard working. Each nationality brings great human and economic value to our community. And so our goal should be: Become the friendliest city in America to foreign guests and future citizens.

Michael T. Fay

President, Colliers International South Florida

1. Being in the business for over 27 years, I remember the SFBJ in the early years, and it always covered great, pertinent business news for everyone in South Florida. Particularly, I remember back in 1989-1991 the combination of S&L bank failures and the massive amount of foreclosures of commercial properties. Several articles were written back then that echo the exact same things we are going through 20 years later. Today, not only are we experiencing massive amounts of residential foreclosures, but we are now encountering a massive amount of commercial foreclosures just like the early ’90s. Articles that have been written about the CMBS market and other bank failures are also echoing many of the same concerns and issues from before. However, we are truly living in historical times that will be looked upon as the Great Recession, as opposed to the Great Depression. We see many great opportunities for our firm, as well as others.

2. South Florida has always been built upon tourism, banking, real estate and import/export. Each one of these areas has been severely affected by the Great Recession, which we are all experiencing. However, South Florida is resilient, and these problems have created large opportunities for the many of us who are survivors and true entrepreneurs.

Nicki Grossman

1. For our community, the No. 1 story of the past 30 years is being transformed from a spring break spot to a year-round, diverse destination. We went from 3 million annual visitors in 1985 when the transformation began to an amazing 10.8 million in 2009, including more than 1 million international visitors. Another big business story for South Florida was hosting our record-breaking 10th Super Bowl, most recently this year. Sept. 11, 2001, cannot be ignored as a date and event of great impact on business. Crisis marketing was the order of the day and, with the help of our industry, county commission and then-Gov. Jeb Bush, we recovered. The recent Gulf oil spill had similar (although probably longer-lasting) impacts on our tourism. The destruction of our real estate market and the global economy impacted every facet of our lives.

2. The region’s strengths continue to be coastal amenities, tourism infrastructure and product, and the diversity of our population. Seminole, Miccosukee, African-American and Caribbean influences are great additions to the destination. A continuing challenge is the absence of a reliable, broad mass-transit effort. There are also the limited funds available for marketing the South Florida area, particularly internationally. While each of South Florida’s counties directs most of their available funds to this effort, our competitors outspend us – in fact, outspend the entire state of Florida – nearly 2-1.

Ed Iacobucci Entrepreneur and former principal, Citrix Systems

1. Few recognize the contributions South Florida companies have made to the greatest revolution mankind has ever experienced: the birth of the Information Age. It was IBM in Boca Raton that started the revolution when it introduced its PC in 1982. In 1987, IBM partnered with Microsoft to design and build the next generation of operating systems, starting with OS/2. In 1989, a small group of IBM engineers – led by yours truly – set off to change the world by developing the world’s first graphical server-based computing platform – several years before the advent of Web servers. The company was Coral Springs-based Citrix Systems. Like George Bailey learned in the Christmas classic “It’s a Wonderful Life,” it would be hard to imagine what the world of computing would be like were it not for South Florida, its companies and its talented people.

2. The South Florida lifestyle is second to none and why many of us choose to call South Florida home. This serves as both a business strength and weakness. Over the years, recruiting top technology talent has proven challenging since we are located outside the technology mainstream (Silicon Valley and Boston). Once acquainted with our culture and quality of life, however, top talent retention happens quite naturally. Although South Florida accounts for much of our nation’s wealth, there is a shortcoming of institutional capital based here. I believe the availability of capital represents the biggest challenge for our diverse business community, now and in the future.

Tibor Hollo

President, Florida East Coast Realty

1. The responsible way the South Florida Business Journal covered the savings and loan meltdown of the last recession

2. Region’s strength: The 1.6 million bilingual human resources able to communicate both in English and Spanish who integrated themselves into every stratum of Miami’s economic and professional life, which, in turn, made the city a home base to which South and Central Americans could come for a variety of reasons such as legal, medical, investments, second homes, etc. It also facilitates major business’ acquisition of bilingual human resources for the establishment of their Miami headquarters, oriented toward the Latin American businesses.

Brian Keeley

CEO, Baptist Health South Florida

1. Loss of major corporations due to merger and acquisition or bankruptcy. I mourn the loss of the major (mostly public) business corporations that were so much a part of our business community in the ‘80s and ‘90s. Airlines such as Eastern and National and banks such as Southeast and Barnett. Also, insurance companies such as American Bankers and John Alden.

Changing demographics of South Florida. Miami is the most diverse city in America today…Today, with more than 60 percent of our residents Hispanic, we are the indeed the “Capital of Latin America” and the resultant cultural and linguistic diversity has transformed Miami into a vibrant and dynamic international community—and a great place to live—and do business. Consolidation of hospitals in South Florida. Not-for profit hospitals that have closed: North Miami General, Miami Heart, St. Francis, Victoria. Not-for-profit hospitals that have been taken over by large national systems: Hialeah and North Shore. All of these loses were due to changing market conditions and weak financial performance.

2. Strengths: A vibrant, dynamic, multicultural community that will increasingly transform Miami into a major international business center for Latin America and the Caribbean. With the opening of the new Florida International University College of Medicine, South Florida will have three medical schools to anchor a “medical mecca” with world-class hospitals and doctors that attract patients from throughout the United States and from abroad.

Also: tourism and hospitality, especially having the three largest cruise lines based in South Florida; Miami International Airport, a key hub for international airline travel; and a great local business newspaper, the South Florida Business Journal.

Weaknesses: an unemployment rate north of 12 percent; heavy reliance (pre-recession) on housing, real estate and construction; lots of homeowners “underwater” due to overheated housing market and overextended buyers.

Also: Miami-Dade County and many municipalities are going broke – many are in denial – with huge deficits caused by plummeting property tax revenue and government employee salaries and pension plans exceeding those in private industry. Unfunded pension plan liabilities are particularly bothersome, with abuses rampant.

Richard Lampen

President and CEO, Ladenburg Thalmann Financial Services

1. Looking at major South Florida business events of the last 30 years, none have been as impactful as the failure of Southeast Bank and the eventual demise of Florida-based banking. Miami was poised to become the nation’s second-leading banking center, and we lost that crown to North Carolina, despite the fact that Florida was one of the best and fastest-growing consumer banking markets in the country. In the mid-1980s, Southeast Bank and Barnett Bank came within a hair of merging. Had that happened, when the barriers to interstate banking came down, the combined firms would have been positioned to be the consolidators in the industry, leading to enrichment of every aspect of the South Florida community. When we lost our famed Florida-based banks – Southeast, Barnett, Amerifirst and American Savings – the support they provided to our local cultural institutions, nonprofits and economic development organizations vanished with them – a void that remains

today.

2. Who could ever have fully anticipated the renaissance South Florida has experienced in recent years? From the emergence of South Beach and Lincoln Road into an international celebrity and tourist destination to the growing number of multinational corporations that have chosen Miami as the base of their Latin American operations, South Florida remains a vibrant area with great opportunity for future growth.

Fred Lippman

Chancellor of Health Professions Division, Nova Southeastern University, and former state representative

1. Some of the biggest stories include the effects of the first capital improvement bonds passed by Broward County citizens. It led to the development of the county library system, roads, satellite courthouses, the jail and other public-use facilities. Other major developments in the 1980s include the construction of interstates 595 and 75 in Broward, the expansion of Port Everglades and Port of Miami, the redevelopment of South Beach into an international tourist destination and the development of the Broward Center for the Performing Arts and other core facilities, which served as a catalyst for the redevelopment of “downtown Broward.” Blockbuster Corp.’s decision to locate its national corporate headquarters in Fort Lauderdale was a signal to the nation to bring other major corporate headquarters to Broward.

The late 1980s and 1990s saw the development of Sun Life Stadium (originally Joe Robbie Stadium), the BankAtlantic Center (originally Broward County Civic Arena), American Airlines Arena, Major League Baseball, the National Hockey League and the National Basketball Association, enhancing revenue generation and expanding the hospitality business. In 1994, the merger between Nova University and Southeastern University of the Health Sciences to become Nova Southeastern University created one of South Florida’s largest private employers, boosting hundreds of millions of dollars into the economy. The decade also saw the dramatic development of single-family homes in Palm Beach County. Meanwhile, South Florida’s biotechnology industry was enhanced with the establishment of Scripps Florida, Max Planck Florida and other world-renowned biotech companies in the 2000s.

The South Florida Business Journal did an outstanding job covering these stories.

2. The region’s biggest strengths are its many colleges and universities, as well as technical training facilities that educate professional and vocational workforces. The region’s biggest challenges include finding ways to enable our small businesses to ensure their financial stability and to create new capital and jobs.

Jack Lowell

VP, Flagler Real Estate Services

1. The first is the creation of modern cruising by Ted Arison, founder of Carnival. He created the concept of having an incredible range of activities on cruise ships. We now have a tremendous number of ships that are headquartered in Fort Lauderdale and Miami. The cruise industry is one of the very few industries where a majority of the headquarters is here.

It was incremental growth, so it was not so newsworthy that it was one banner headline in the newspaper, but I think there has been consistently good coverage.

The whole change in the banking industry has been an unbelievable series of events over the years. When I first came here, you had county-by-county banking. The state changed the banking regulations, allowing branches around the state. Once you could do a branch network, Florida becomes a very attractive market. In the 1980s, the federal government encouraged foreign banks to do business in the U.S., so that drove a lot of international banking and it was a great heyday. After Sept. 11, 2001, the Patriot Act was passed and did the reverse.

2. Our strength continues to be with international business and diversity. Our weakness is more perception than reality, in terms of education and transportation systems. But, there are things coming together in the education sphere that I am very optimistic about.

Neil Merin

Chairman, NAI/Merin Hunter Codman

1. The explosive growth of IBM, mushrooming to a workforce of almost 13,500 at its peak, was based on the development of the original PC. Thought to be able to generate maybe 800,000 units of sales over its life, IBM was shipping over 1.5 million PCs a year out of Boca Raton. Political infighting ultimately saw IBM break up the PC division and spread it out across the country. But, what were left behind were thousand of highly trained engineers and designers.

A similar story played out in northern Palm Beach County, where Pratt & Whitney also employed over 10,000 workers. When Pratt decided to consolidate to the United Technologies home base in Hartford, Conn., almost 90 percent of its work force decided to stay. Today there are over a dozen aeronautical engineering firms in northern Palm Beach County, employing almost 15,000 people.

2. The biggest long-term strength is the physical and actual position of the region as a bleeding-edge melting pot. The continuing ability to pull people from North America and South America will bring a tremendous pool of human potential, increasing market size and expanding money flow into the region. The challenges arise directly from the benefit: Where do we put all these people? How do we preserve an attractive living environment? What services will we need?

Jorge Mas

Chairman, MasTec

1. Hurricane Andrew’s impact can still be felt throughout South Florida 18 years later. Overnight, employers were faced with challenges they were mostly unprepared for: destruction of the infrastructure; scarcity of basic resources; mass exodus of employees and their families, along with the potential negative economic impact to the region. Local businessmen rose to the challenge, seized the opportunity and provided the leadership necessary to both rebuild and improve the quality of life in our communities. This led certain sectors of our economy (i.e., construction, retail, and tourism) to experience unprecedented growth. The scars of Andrew remain present today, but they serve as a reminder of the resilience of our community, one that rose from adversity and united at a time of despair. Adversity only made us stronger – “we will rebuild.”

2. We enjoy many distinct advantages that will facilitate growth as South Florida recovers from the economic recession that has plagued our nation. Our internationally recognized academic institutions attract the diversified pool of talent, which, in turn, support the many multinational corporations headquartered in the region. Our proximity to the Americas makes us a natural choice for foreigners seeking to invest in the U.S. by purchasing vacation homes or income-producing property. In addition, our beaches, fine dining and world-class entertainment continue to bring in tourism dollars. The myriad of opportunities here ensures a strong resurgence.

Linda Quick

President, South Florida Hospital and Healthcare Association

1. It’s hard to believe I’ve been involved in the health care industry this whole time. Clearly, the consolidation of hospitals and health plans has been a “big business” story in more than one sense of the term. It is also an arena where the Business Journal, as a weekly publication, has done an excellent job. By following mergers and acquisitions, and the growth of systems, readers have been able to see where South Florida led much of the nation.

Another related story has been the adoption of managed care by Medicare beneficiaries. Miami was an early demonstration area for Medicare HMOs, and remains one of the highest concentrations of seniors in managed care. The SFBJ has carefully followed successful and unsuccessful business ventures as they come and go in this complex arena.

Finally, the movement of medicine into the world of technology has provided, and still provides, a steady stream of stories in our industry. Whether it’s multiple transplants, cures for paralysis, breakthrough medications or mainstreaming use of robotics and information technology, SFBJ covers the who, what, where and cost implications of innovation.

2. The strength of South Florida’s health system is its people. They are smart, creative and committed to success. Our private and public educational institutions produce the best and brightest graduates, but keeping them here remains a challenge. The unfortunately deserved reputation for being the highest-priced and most fraudulent medical marketplace continues to work at cross-purposes with efforts (especially in Miami-Dade) to retain and recruit the right workforce.

Another strength is our diversity. In this case, I think it is important to consider more than the ethnic diversity of the population, but rather to look at the breadth of the health care industry itself. From small doctors’ or dentists’ offices to huge multinational hospital corporations, they’re all right here in South Florida.

Finally, a real distinguishing characteristic is the public commitment to assist the least fortunate among us. Not only do taxpayers contribute hundreds of millions of dollars a year to support government-owned, -operated and -financed facilities and programs, but business throughout South Florida donate time and money to voluntary health agencies devoted to research, education and treatment of the diseases that afflict us.

Kelly Smallridge

President and CEO, Business Development Board of Palm Beach County

1. The biggest stories for South Florida over the last 30 years included the boom in real estate and construction along with the growth of South Florida as one of the largest and most dynamic regions in the state. The number of people moving to South Florida escalated significantly, the infrastructure of rail, ports, airports and highways were enhanced. The people moving in were of many different ethnic backgrounds, creating a more culturally diverse population. Residential neighborhoods, malls and office buildings were constructed, adding to the density of the area – and all of this led to our area becoming a very sophisticated metropolis.

With this said, many more national and international companies starting looking at South Florida as a globally competitive business environment, and we landed some very notable, world-class companies in Broward, Miami-Dade and Palm Beach counties. What was once known as a place to vacation or retire is now a very desirable business location.

South Florida, in the last 30 years, has transformed its economy from one that was dependent on tourism, construction and real estate to one that is more knowledge, information and technology based. Palm Beach County landed two of the world’s largest bioscience research and development institutions: The Scripps Research Institute and Max Planck. In addition, our county is strong in aviation, aerospace, business, financial services, communications, information technology, health care services and technology.

2. South Florida’s strengths: quality of life; the transportation system; access to the three ports and three international airports; a culturally diverse population; an educated workforce; public and private institutions; a diverse business base of companies; and the fact that it’s an affordable location to do business and live. Weaknesses: There is a lack of major corporations and the K-12 education system does not rank high nationally.

Don Soffer

Founder, Turnberry Associates

1. The most significant South Florida business story of the past 30 years was the resurgence of Miami Beach. It’s amazing to think that this area, with its illustrious history and beautiful beaches, was in danger of becoming irrelevant in the early 1980s. Yet, through foresight, dedication and a bit of luck, Miami Beach is once again one of the world’s premier destinations, complete with luxury hotels, upscale condominiums and world-renowned restaurants. And as Miami Beach thrives, so does the entire region.

2. During the past decade, South Florida has become a playground for the wealthy – a place where business and vacation travelers enjoy spending money. But, there will always be stiff competition for those elusive dollars. Great destinations are not just buildings and physical attributes. They embody the atmosphere and environment that surround them. To remain in the forefront, our region’s hospitality sector must not only maintain, but exceed, the quality and standards it’s achieved over time.

Terry Stiles

Chairman and CEO, Stiles Corp.

1. Some that come to mind:

IBM pulling the PC division out of Boca Raton after the state passed the unitary tax bill. I believe we lost over 5,000 jobs.

Huizenga bringing Florida Panthers hockey to South Florida, which resulted in the arena for Broward County. This entity went on to be the catalyst of Boca Resorts, which owned Bahia Mar Beach Resort, Hyatt Regency Pier Sixty-Six Resort & Spa, Naples Grande Beach Resort and the Boca Raton Resort & Club.

2. The region’s strength is the quality of life that has evolved in our region. This is a great place to live and work. We now have affordable housing and we can compete with other regions that we couldn’t have done before. The fact that we do not have a state personal income tax is huge. Our geographical location servicing Central and South America is a big advantage.

Stanley Whitman

Owner, Bal Harbour Shops

1. South Florida’s biggest business story is how the Cuban invasion profited South Florida. Nothing else comes close.

2. South Florida’s business strength is its weather. Our challenge is restraining government from spending taxpayers’ money and overregulating business.